DENNIS
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COSTCO BUYS OUT COM-MEX
Got this off the emerging, cutting edge news source, The Punta Banda Bulletin Board:
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The Seattle Times
Business / Technology
Originally published Thursday, June 14, 2012 at 5:54 PM
Costco buys out partner's stake in Mexican division
Costco Wholesale is buying the 50 percent stake held by Controladora Comercial Mexicana in its Mexican division for about $760.4 million. The deal
might lead Costco to put more money into its Mexican operations.
By Seattle Times news services
Costco Wholesale is buying the 50 percent stake held by Controladora Comercial Mexicana in its Mexican division for about $760.4 million, the
companies announced Thursday.
Costco and Controladora have each had a 50 percent interest in Costco de Mexico, which Costco Wholesale ran.
At the same time, Costco Mexico declared a dividend of approximately $340.9 million, which will be split evenly between a Costco Wholesale subsidiary
and Controladora.
Costco Wholesale said it will use its share of the dividend along with cash on hand and investment balances to pay for the acquisition.
The buyout will consolidate control under the management of Issaquah-based Costco Wholesale and give Mexico City-based Controladora cash to pay down
debt.
The joint venture has grown little in recent years, so Costco Wholesale will probably put more money into its Mexican operations, said Carlos
Hernandez, an analyst with Planet Retail in Madrid.
"Costco hasn't grown that much in Mexico," Hernandez said.
"Controladora didn't have money to expand its own stores let alone the joint-venture stores with Costco. Now, Costco can expand into other cities."
Costco Wholesale has 32 stores in Mexico, the same number it had in 2009, Hernandez said.
Janney Capital Markets analyst David Strasser said he expects the deal will add 10 to 12 cents per share to Costco Wholesale's earnings over the next
twelve months, and he raised his estimates based on the announcement.
Stifel Nicolaus analyst David Schick was bullish on the long-term prospects for business in Mexico
Costco Mexico CEO Jaime Gonzalez Solana will remain in the post and Controladora Chairman Guillermo Gonzalez Nova and CEO Carlos Gonzalez Zabalegui
will continue as board members.
The deal still needs the approval of Controladora shareholders and the Mexican Federal Competition Commission.
Costco Wholesale runs 602 warehouses, including 435 in the United States and Puerto Rico, 82 in Canada, 22 in the United Kingdom, 13 in Japan, eight
in Taiwan, seven in South Korea and three in Australia.
Its stock closed Thursday at $89.83, up $2.40, or 2.7 percent. It has had a 52-week trading range of $70.22 to $92.10 per share.
(Information from The Associated Press and Bloomberg News is included in this report.)
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thebajarunner
Ultra Nomad
Posts: 3752
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Location: Arizona....."Free at last from crumbling Cali
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Mood: muy amable
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Costco is an amazing company.
Couple of years ago I read their annual report.
They operate on a 14% gross profit margin- extremely low for the industry.
The year I read they had a net profit of $500 million.
Guess what the total revenue was for memberships???
$500 million....
So, at least in that year they broke even on operations and netted the fees.
Strange way to run a business, but hey, its their business and it works.
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comitan
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Sounds very good, maybe we will get one in La Paz now.
Strive For The Ideal, But Deal With What\'s Real.
Every day is a new day, better than the day before.(from some song)
Lord, Keep your arm around my shoulder and your hand over my mouth.
“The sincere pursuit of truth requires you to entertain the possibility that everything you believe to be true may in fact be false”
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Ateo
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Catavina needs a Costco.
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BajaBruno
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I'm not sure Controladora Comercial Mexicana had much choice in this buyout. They are mired in debt after their currency hedging strategies went sour
in 2008 and they have notes coming due.
This makes a nice payday for Comercial Mexicana, but I wonder what they paid to get that 50% share in the first place.
Christopher Bruno, Elk Grove, CA.
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DavidE
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Location: Baja California México
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Mood: 'At home we demand facts and get them. In Mexico one subsists on rumor and never demands anything.' Charles Flandrau,
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Ah yes La Comercial mired itself in derivatives just like CeMex.
Costco may expand the number of its warehouses in Mexico, but I wonder what will happen to all those Kirkland Signature products that now grace the
shelves of La Comerciál?
A Lot To See And A Lot To Do
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tiotomasbcs
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Location: El Pescadero
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My vote for Costco , La Paz, tambien! Lunch in town and a walk along the boardwalk! Maybe not this time of year as I hear the air temps having
been up to 100 degrees. Good info. Tio
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DianaT
Select Nomad
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Registered: 12-17-2004
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| Quote: | Originally posted by soulpatch
| Quote: | Originally posted by thebajarunner
Costco is an amazing company.
Couple of years ago I read their annual report.
They operate on a 14% gross profit margin- extremely low for the industry.
The year I read they had a net profit of $500 million.
Guess what the total revenue was for memberships???
$500 million....
So, at least in that year they broke even on operations and netted the fees.
Strange way to run a business, but hey, its their business and it works. |
They have a philosophy of taking care of their employees......
It is possible to have a profitable business and still pay decent wages to people. |
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pointdog
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Posts: 48
Registered: 3-23-2008
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Costco La Paz!
Costco La Paz!
Costco La Paz!
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